tv Worldwide Exchange CNBC October 14, 2015 4:00am-5:01am EDT
welcome you're watching worldwide exchange. >> these are your headlines from around the world today. >> jp morgan kicks off the financial reporting season with a revenue and profit miss sending shares down in frankfurt. >> democratic presidential candidates clash in their first primary debate but front runners hillary clinton and bernie sanders agree the economic playing field needs to be leveled. >> it's our job to reign in the excesses of capitalism so that it doesn't run a muck. >> it doesn't mean anything if
all of the new income and wealth is going to the top 1%. >> global oversupply means lower oil prices are here to stay. that's the warning from the russian minister in an exclusive interview with cnbc. >> one has to get used to it, learn to live with it and to work taking these conditions into account. >> and we get the keys to the ikea house as the ceo tells how europe can get it's swagger back. >> the picture that we have is that europe certainly is back and maybe the perception is lagging behind a little bit but reality is that we're seeing quite good times here. >> all right. let's dig deeper into the jp morgan numbers. a disappointing third quarter and revenues missing forecasts. profits were lower in three of the key businesses. total income rose 22% but this
is thanks to one of tax benefit. jamie dimon said they faced a promising global environment. now other financials set to report today, bank of america, black rock and wells fargo, they're out before the bell and citigroup and goldman will release their third quarter scorecards tomorrow. >> let's check in on jp morgan shares and they're trading lower today in frankfurt, echoing the after hours session and we were pricing this in as going to be a tough quarter for the big banks in this low interest rate environment meaning that net interest margins are narrow but this is just a roll out and just a start of what we're going to see from the other big banks in a tough environment. >> you might be right. especially in the volatility we've seen over the course of the third quarter. to some extent volatility is good because it drives higher equity trading but what we saw happening this third quarter depressed fixed income trading and equity capital markets, debt
capital markets activity, that was lower than expected. you have bright spots in terms of advisory but can that rescue the rest, i'm not so sure and what we're going to see from the likes of goldman sachs and the european banks when they report the next couple of weeks is depressed earnings coming from lower revenues. >> deutsche bank says 8 out of 13 banks should be seeing compression when it comes to the net interest margins but it's all the cost savings right now. you heard they're shrinking their balance sheet. that means head count reduction. so 40,000 since 2012. it's not a healthy environment for the big banks. >> there's a good reason why jp morgan is doing that. they're becoming smaller and a lot less complex. they want to reduce the capital surcharges. currently it's 4.5%. they want to get to 4%. so that is a pretty good move
though on the other hand you have to wonder to what extent they'll be chopping off some of the business that make them the most money. so that's always the big trade off, isn't it? >> yeah. in this regulatory environment where you have to hold so much more cash just as defense and really all sort of software environments. i think it's tough to be a bank, right? >> it is tough. yeah. also worth noting the outlook for the fourth quarter. they talk down expectations for the fourth quarter. >> usually you do. >> that's true. but this fourth quarter there could be a lot of volatility with the potential fed hike. maybe not. but we know that the end of december is usually pretty quite so always a pretty quite quarter. jp morgan says it's going to be quiter than that. >> and just the beginning. only the beginning. we have more coming out. let's talk about the big story as well and a lot of people tuned in to watch cnn for the democratic presidential candidates locking horns in
their first televised at the bait of the 2016 primary season. the front runner on stage, there you see her, hillary clinton and bernie sanders both garnering strong reviews from pundants. they disagreed on where to look for an example. >> you see every other major country providing health care to all people as a right except the united states. you see every other major country saying moms when you have a baby we're not going to separate you from your newborn baby because we are going to have medical and family paid leave like every other country on earth. those are some of the principles that i believe in and i think we should look to countries like denmark, like sweden, and norway and learn from what they have accomplished for their working people. >> i don't think we should
confuse what we have to do every so often in america which is save capital i feel from itself and i think what senator sanders is saying certainly makes sense in the terms of the inequality that we have but we are not denmark. i love denmark. we're the united states of america and it's our job to reign in the excesses of capitalism so that it doesn't run a muck and doesn't cause the kind of inequities that we're seeing in our economic system but we would be making a grave mistake to turn our backs on what built the greatest middle class in the history of the world. >> just one of many interactions last night on stage in las vegas and yeah the clash on many things i think there was moments where the rest of the field tried to attack hillary clinton but it was very obvious who was the front runner in this. >> you still think it was hillary? >> definitely. >> a lot of people think it was bernie sanders.
>> have you looked at the polls this morning? hilary on top and she spoke most of the night and most of the attention went toward her. it was also a more conservative debate compared to the republican primaries, right? the televised debates which had a bit more slander and finger pointing, possibly more personal insults. this was a little more polite. >> definitely but then you also need to keep in mind that the democrats actually agree on a lot of issues in contrast to many of the republicans. what they agree on is for example race taxes on the wealthy, regulate guns. so there was a little bit of sparring back and forth on syria and the gun laws, et cetera, et cetera, but by and large -- >> that was a very contentious debate between bernie sanders and hillary clinton. she accused bernie sanders of not being tough enough on gun
laws. so there was disagreement there. >> but they agreed to a much bigger extent than the republicans do and this debate really didn't shake up the race. it didn't move the needle too much. we know that clinton is still the most polished. she's the most experienced obviously in terms of debating. bernie sanders attacked big corporations, inequality, that wasn't a surprise so it didn't leave me with a lot to chew on for the next couple of days when it comes to the polling and we know that going into this debate clinton lost a lot of ground. she lost about ten points in five days alone versus bernie sanders. >> but the polls afterwards say she put on a strong performance. still leading in the polls but the big question mark and the elephant in the room is what was joe biden doing last night? i'm sure he was watching intently but when is he going to dip his feet into this race if he was watching saying maybe he has a chance against such a small field and an obvious front
runner right now. be sure to tune in when cnbc hosts the next republican debate. that will take place on october 28th and, yes, we have the trump back on stage. donald trump was watching intently last night as well. >> oh, he was. and he tweeted. do we have the tweet up. he said sorry there's no star on the stage tonight. i think that's lame coming from the real donald trump. i would have thought with all of his verbal attacks in the past he would have come up with something more ingenious. >> like what? >> i don't know. i'm not him. i don't want to be him. but didn't blow it out of the water. mike huckabee said i trust bernie sanders with my tax dollars like a trust a north korean chef with my labrador. >> defense secretary ash carter said talks with moscow were,
quote, constructive debate saying it will not alter it's own air operations or cooperate with the kremlin given russian support. in moscow they asked vladimir putin about the international perception of the stance. >> thank you for the questions. mr. president, over the weekend u.s. president obama called into question your leadership over syria. said that it's rather than going after isis. also said you're running down the economy here. how do you respond to president obama's comments and what would you say to international investor who is are dissuaded from putting money into the russian economy because of such remarks? thank you.
>> translator: as we say, you have mixed apples and oranges together. at the military level we asked them to give us the information regarding the targets they believe are 100% belonging to terrorists and what we received as an answer is that they won't do that. then the second question was asked, please tell us which targets should not be attacked by us. no answer received. what should we do then? >> let's get out to jeff cutmore. based on mr. putin's answer it doesn't seem like there's a lot of coordination. can we actually expect more, realistically? >> well, i hope so because i think what we have learned has muddied the waters around our understanding of how this syrian conflict is being managed not only by the united states, it's
allies, but of course by russia. one would hope that there will be further cooperation here not just on safe passage of aircraft but hopefully on targets. the narrative in moscow is different from the message being presented so far in washington and i think we need to wait and see whether the white house now feels the need to response to president putin's comments so that we might get some clarity on exactly what intelligence is being shared by military authorities on both sides. moving on from that, when i've been here in moscow i also caught up with the energy minister for an exclusive interview to talk about how russia sees the energy markets evolving and you'll know as the price has fallen the russians have maintained output, not cut
it and i asked the energy minister whether that policy was about the desperate need for additional government revenue from oil taxization and ultimately about whether it was to drive higher cost u.s. shale companies out of business. >> first of all i would like to say that the gas and oil industry is one of the most important industries in russia. a lot of people work in the sector directly and the industry is a customer for a large number of companies that supply products and services to the oil and gas sector. of course our strategy, despite the depletion of our old fields is to make a point at developing new ones which is difficult. that's why new technologies are used, labor effectiveness is increasing, enabling us to develop our industry and enhance
productivity. we maintained our rate pretty much unchanged over the past three to four years but we witnessed a lot of inflow. a lot of shale from the united states. the u.s. alone has been responsible for an additional 5 million barrels a day which is a large amount and the market hasn't been able to process this huge quantity of oil. >> do you want to drive those american shale producers out of business? >> translator: definitely no one has such goals because it's all market competition and, in fact, there's a lot of markets in the world extracting and importing oil. they now have domestic reduction so buy less from the market. i want to stress again that russia does not exert pressure on the market with any additional supply on its path. on the contrary it's supplied by others and the normal growth
rate is 1 million barrels a day but the supply growth that i previously mentioned is well in excess of that. this additional increase is not produced by russia but by other countries. we aim at maintaining our rate and our share and remaining competitive in tough conditions. it all depends on competitions and the economics of projects. the u.s. has expensive projects and given the low prices now no investments will go into their field and other countries have costly extractions as well. it's a normal market situation. the biggest companies will survive. increase their labor product activity. increase their effectiveness. these are the defining factors that influence policy in this environment and competition. >> let me finish by asking you, what is your working assumption for the headline oil price over the next 12 to 18 months.
>> translator: let me say in my view if we talk specifically about the figures they will fluctuate in the range of $50 barrel. possibly 55 to $60 but these doo deviations will be short lived. we have entered a period of quite low oil prices. a large number of factors effected. they provide opportunities to extract more oil. it gives us grounds to say that in this perspective prices will be at low levels. one has to get used to it, learn to live with it and to work taking these conditions into account. >> alexander novak there, the russian energy minister in that exclusive interview. he did also talk about new taxes that the finance ministry wants to impose on the energy sector next year. he said if those efforts go forward to raise about 150
billion roubles it could mean production will be effected in 2016, 2017 and potentially 100,000 barrels a day will come off russian output. that is not a huge number in terms of russia's total output. but it is worth taking note of and those taxes of course not widely welcomed by the energy sector here. susan, back to you. >> jeff, thank you so much. we're going to take a break here on worldwide exchange. coming up on the program, we take you beyond the studio gates when wilfred frost tries to get some of that james bond swagger. bond, james bond. who came out on top? hillary clinton and bernie sanders go head to head in their first televised debate. plus julia goes mattress testing in ikea but will she sneak in a snooze?
a couple of factors playing into the weakness. probably a little bit of profit taking after the strong gains across the globe last week but then also the continued china concerns. we had the weak import numbers yesterday. today we had worse than expected inflation numbers and then we had a couple of disappointing updates from the likes of asnl and not voting well for technology stocks. off by 1%. telecons losing 1.7%. asnl is a chip maker out there that disappointed with it's numbers. also disappointing with it's numbers. basic resource is the only sector that's getting out a very very modest gain, susan. >> does europe need britain if it's to succeed in getting it's swagger back? speaking to jeff on the sidelines of the imf summit in
peru george osborne addressed concern that sentiment is rising in the euro zone. >> the european union is going to be a source of prosperity. they would judge that by what's going on in europe at the moment. if you think about why did certain countries join the eu, france, germany were ending century old and spain and portugal were escaping tyranny. we actually wanted to modernize our economy and be part of the trade area. so the economic benefits have always been pair mount and they are clearly becoming benefits.
>> is it damaging business investment into the u.k. though? and preventing companies from hiring right now as they wait for a date to be announced for the referendum? we talk to companies all the time who feel uncertain about what they're investing in when they put money into britain right now because they're multinational or international companies and they want to know where britain stands. are you not concerned that unless you expedite this process we'll find that hiring slows investment declines? >> well, i see no evidence of that at the moment. quite the reverse. britain is attracting a huge amount of the world's investment and second only to america and china. so we are the third largest source of investment in the entire world. which given our size is no small
feat. we're atracking more investment from china than germany, france, and italy all put together. there's no evidence at the moment that somehow this referendum is hurting things. by the reverse, people see britain as a good place to do business and when they look at what we're asking for in this european negotiation i think most businesses would say absolutely. we support britain's efforts to make europe more competitive and so people are voting with their dollars and their yen and euros and putting the money in britain. >> but are you worried that there is a perception heightened perhaps by david cameron meeting with chancellor merkel? that there is a back door deal being hatched here that will encourage the germans to vote in
favor of the u.k. staying in? that there's an element of spin being introduced to this whole issue of brexit? >> i don't think so. in the end the british people will decide. it will be found out. >> mow let's get to a man that certainly has swagger. wilfred frost joins us live outside westminster and i'm just wondering, wilfred, the future of the u.k. and the eu. >> massive question susan. thank you for that overly generous compliment and i wish it was true. the most important point to look at at the moment is how this sentiment in the u.k. has shifted over the summer. immediately after the general election back in may when we had the confirmation that we would, indeed, have a referendum i felt at that time that the likelihood
of a brexit was low. we only had 12.8% voting for the u.k. independence party and 37% for the conservative party. of which of half was skeptics. that left a huge majority pro wrur penne. the latest poll actually put the exit vote ahead of the first time in over a year. 40% wanting to lose, 38% wanting to stay. sentiment shifted over the summer. i think it's now largely too close to call. what are the reasons for that change? there's two main ones over the summ summer. the refugee crisis and immigration issue although ki don't think that's the one on voters minds. it highlights one crucial issue. the way greece was treated would be suppressed that germany wasn't being understanding of the issues facing the greek economy.
i think that resinated with some u.k. voters that wonder whether the u.k. is sovereign over it's own destiny. that's the key issue for me. not even so much the economic issue although clearly that is relevant. it comes down to sovereignty. is parliament behind me still calling the shots or is it brussels? renegotiate with brussels and the debate until that point is hard to call. >> wilf, thank you so much. outside westminster. after this break, mad about meatballs. a trip to ikea for food therapy. >> no trip to ikea would be complete without indulging in a plate of meatballs at the end of your journey but now with focus on sustainability of the company do you go traditional or do you
>> it's our job to reign in the excesses of capitalism so that it doesn't run a muck. >> it doesn't mean anything if all of the income and wealth are going to the top 1%. >> translator: one has to get used to it, learn to live with it and to work taking these conditions into account. >> and we get the keys to the ikea house as the ceo tells us how europe can get it's swagger back. >> the picture that we have is that europe is back and maybe conception is lagging behind and the reality is we're seeing quite good times here.
>> let's get straight to u.k. data. let's kick things off with earnings because that really is key for the boe at the moment. we're seeing u. k. average weekly earnings up 3%. that's lower according to reuters poll 3.1% was the forecast. bonus is up 2.8% year on year and that is also a tad weaker than forecasts in terms of the unemployment rate, 5.4% just a touch smaller than expected. sterling dollar was higher going into the data but we saw sterling falling versus the dollar after we saw the u. k. labor market data and unemployment rate falling to a new seven year low but hey, the good news, pay growth is improving. >> we have three straight days
of declines in europe after asia markets close lower. partly being weighed down by chinese inflation data with producer pricing coming in below expectations. consumer prices rose year on year. that was forecast of 1.8%. a little less than what economists forecasts and this is the latest set of data. a 43rd straight month of a negative read when it comes to producer pricing. singapore's central bank announced its going to further loosen monetary policy. this is after the country narrowly escaped a technical recession in the past quarter. so the monetary authority of singapore, the central bank, they don't move interest rates in monetary policy. they do something with the currency and they say they're going to, quote, slightly reduce the pace of the currencies appreciation. the dollars appreciation versus those of the main trading
partner. they hit a multiweek high following that announcement. >> a quick look. what we're seeing is the euro dollar. it's resilient. 11408 this morning up by .3%. in large part because the dollar is to weak. the dollar index at a 3.5 month -- week low. that's because the fed hike, the first one in nine years could be delayed further. in today's trading session all eyes on today's retail sales. the aussie dollar is higher against the u.s. dollar but lost steam against the commodity prices. brent crude, wti crude after two days of losses continue their downward trend. brent crude at 4908 and wti at 4665. we do get the toe data but one day later than originally planned because the holiday on monday we'll get it tomorrow. >> more disconnect from the
federal reserve with st. louis fed president james bullard reiterating his call that now is the time to raise rates but at the same time another fed governor has struck a much more dovish tone. steve got the chance to speak with him exclusively. explaining why it's not appropriate to hike rates in this current environment. >> there is a good bit of uncertainty right now. there's the debate between whether we've got sort of extended cyclical effect or whether there's some secular things going on in the economy that are changing growth potential and changing optimal policy. i don't think the fomc is going to be able to disentangle that before we have to make decisions but i do think under these circumstances it's probably wise not to be counting so much on past correlations. things like the phillips curve which have been effective for ten years now and instead to
look for some tangible evidence of, for example, pick ups in wages or inflation that allow us to make informed decisions. >> would you put yourself in the camp of one expecting a rate hike this year? >> i do want to orient toward how we're thinking about the economy. i will say that based on what i just said and based also on what one might call a risk management approach of being concerned that a premature rise might be harder to deal with than waiting a little bit longer, right now, my expectation is given where i think the economy would go. i wouldn't expect it would be appropriate to raise rates. but i want to hasten to add that is an outlook that is based on developments in the economy and our being forward looking about it. i do think there's been too much focus on a particular meeting and a particular date and not enough on the overall conditions of the economy.
>> it's not just about flat pack furniture and meatballs but europe can also learn a thing or two from ikea about how business can work it's swagger on the global stage. it's fair to say that this is a company that's revolutionized everyone's world. >> you're absolutely right. the ultimate furniture and life style disruptor. we're talking about a company that's generated 30 plus billion euros in revenues in the last fiscal year. it operates in 42 different countries. probably best known for its flat pack furniture but they do blend cutting edge design, trying to keep prices low and also the sustainability element. they want to be energy sufficient at some point in the future. they also want to be raw material sufficient in the future as well. they invested in wind technology and in a forest in romania so it's a interesting company but
it's also quite swagger. it's a private company and when i spoke to the ceo he pointed out that they see this as an advantage. they can focus on the long-term strategy and continue to invest even when-volatility going on in the stock market. that part of the strategy but what about europe of course as well. i can tell you they were excited. double digit growth in the u.k. and strength coming through from germany. when i spoke to the ceo i asked him, is this a sign that the european consumer is well and truly back? >> definitely. we have growth in all european markets. we were flat in switzerland and yes we had growth in all our markets. many decide on european markets in portugal and spain, italy to scandinavian countries are booming. so the picture that we have is that europe is certainly back
but perception is lagging behind a little bit but the reality is we're seeing quite good times in europe. >> what about in the corporate space? if we look at invest lt it's still down 15 to 20% since the start of the financial crisis. you're saying perception and the reality haven't quite met yet. what are we waiting for in europe? we're waiting for the chinese, waiting for u.s. investors to come in and there's plenty of financial fire power to do the jobs ourselves. what are we waiting for? >> we have no reason for waiting. we should just have the confidence to see what the consumers are telling us. what's happening out in the market and to go with that and the consumers are ready to on the to improve their life at home and whatever business that you're in and we see a big wish and also of course that power continues to grow so we should just, i think, continue to fuel
our business and follow the customers because they're telling us something very important. >> i think if we look at the ipo activity, the capital markets in europe and compare that to the u.s. we always think that europe is in some way lacking. that's a benchmark of success and growth in europe. is ikea proof that you actually don't need to do an ipo? you don't need to be a private or a public company to be successful? >> i think so. i actually say that it's the other way around. for us it has served very well to be privately held or to be held by a foundation that ikea is because in our model the money never goes away. the money can either be handed out for charity or reinvested in the business and that's of course an enormous strength that enables us to continue to invest year after year, year after year, even if the market is trending up and down. and i think i would be prepared
to even go a step further and say that the privately held companies actually have an advantage where we don't need to be so dependent on the fluctuates of the stock market. >> also reporting to shareholders every three months they would be grilling you about india and saying come on when is the start date as opposed to you being able to say look we got it when the supply chain is sorted when we're comfortable. >> the advantage of the stock market is i guess, the trigger that that gives you, the quarterly thinking. but of course the advantage of our model is the long-term thinking that we constantly can grow in our own pace. take our own decisions with our own resources. it's a huge advantage. >> part of a much bigger conversation where we talked about actually how much tax a company pays. what is their prospects for emerging markets? india is their next target focus
but that's going to be it for me and here is madam meatballs signing back and handing it over to you. that could take me awhile to live down. >> we did get the sneak peak of you eating meatballs before. but i'm a big fan of the hot dogs at the check out. who has time to sit down at an ikea and have the meatballs. got to do the shopping. all you have time for is a little bit of a hot dog. that's it. >> well, do you know what, that's a great point actually because by the time you made your way around the store, if you haven't been lost at least three or four times then you're really lucky and probably cutting down on your meatball consuming time. i didn't try the hot dog carolyn but there's always time. >> there's always time. thank you so much for your very important effort there at the ikea stores. >> i like the soft serve ice cream but, you know, if julia is still there my question to you julia -- no, she's gone. well, i don't blame her.
she's cold. she's in an ikea parking lot. i don't blame her for wanting to get out of there. >> she wants to try the hot dogs. >> you think so? >> i wanted to ask her about the flat pack, the way they actually deliver the flat pack packaging and getting you to install the furniture itself. there's so many parts and knobs. >> that's the fun of it. >> i don't know. it's a chore. i think they should work on that. advocate for me. still to come on the program, university of wisconsin could be taking a hefty $860 million bite out of apple. stay tuned to find out why.
the chip maker did manage to beat expectations. revenue of 14.5 billion and the street had been expecting 59 crepts on 14.2 billions so a beat there on the bottom and the top for intel. the internals of the report were interesting. it's client computing group which includes chips for pcs generated revenue of 8.5 billion and that was up sequentially but down 7% year over year. investors aren't surprised by a challenged pc market and that 8.5 billion is better than wall street had forecast. then there was the business of chips for data centers. now that generated 4.1 billion and that undershot what analysts had modelled. that group is a big source of optimism for intel bulls who hoped that the data center business can offset declines in a challenged pc industry. turning to guidance, intel is telling investors to expect q-4 revenue of 14.8 billion plus or
minus 500 million. that's in line with what analysts expected to see. for cnbc in san francisco. >> staying with technology, apple has a patent lawsuit to the university of wisconsin. they find that the iphone maker used technologies owned by the university's licensing arm. apple could be facing up to $862 million in damaging. >> shares in sandisk spiked saying they are a possible acquisition target. they have expressed an interest in sandisk valued at under $13 billion. at the close on tuesday, up by 8.9%. >> so all this week we are been focussing on some of europe's success stories and one company looking to forge closer ties with the european countries is proto labs. the u.s. based custom parts
manufacturer just acquired german prototyping company and 3-d printing service here in britain and joining us in a first on cnbc interview, vicki holt. ceo of proto labs. >> great to be here. >> thank you for joining us today. we have been talking about europe trying to get it's swagger back. given that you have been investing in a lot of european companies do you believe that growth is returning to had region? >> absolutely and i'm excited from a manufacturing point of view because we don't make things the way we used to anymore. today we're actually making things with a combination of information technology and hardware. >> you don't necessarily think of manufacturing but this is high end manufacturing but is it also opportunistic given where the currency is sitting? >> i would say it's actually strategic because what we have done is we have added 3-d printing to our suite of digital
manufacturing services and it's actually accelerating our growth in 3-d printing coupled with our other surfaces. >> can you explain to me in a nutshell what exactly is it that you do? if you're not an engineer, if you're a laymen what is it that you work on on a daily basis. >> that's a good question because we're a cool company. we take information technology and virtually manufacture parts in a matter of minute which is allows us to manufacture the finished part for the customer, custom injection molded machined or 3-d printed part in as little as a day. >> what i have noticed is that you have been pretty profitable from very early on. how is it that you're able to do that? is it because your fixed costs are so incredibly low? because you work on the on demand basis? >> we enabled the process with software. we take that nonrecurring engineering in the front end of the development process and automated it with software which allows us to turn custom parts
for our customers very quickly and in very low volumes very cost effectively. >> i was reading some of your comments and the one that struck me the most is the quote from you that data is the new oil. what does that mean? >> we collect data from our front end. we're entirely web based. so we collect a tremendous amount of data about how our customers are interfacing with us throughout the web as well as data which allows us to continually refine and improve our software and become more efficient on producing low volume custom parts. >> using data to drive efficiency of both our marketing and our customer acquisition as well as our manufacturing process. >> yeah because when you think of oil it is different. so i was thinking how is that comparison. >> finally 3-d printing, you brought one of the businesses here in the u.k. to what extent is that a big threat for you and is it because you can't beat them, you want to join them?
>> it's all about the development process. our customers, over 75% of our customers had been using 3-d printing in the concept phase now we're capturing that by starting with concept all the way through to development and low volume production. >> all right. thank you for your time. appreciate it. the ceo of proto labs. and when you think of u.k. swagger, one location undoubtedly comes to mind, the area's home to the iconic pinewood british film studios where specter was filmed and one man that can't wait to see it is wilfred frost. he's at westminster. >> absolutely. that movie comes out next week and i for one certainly cannot wait. now as you rightly said, of course this week we have been exploring where europe has or hasn't gotting swagger and the film industry is certainly a sector that has swagger and i was lucky enough to go to pinewood studios last week to explore the current state of the u.k. film industry.
james bond, harry potter and paddington bear. what do they have in common? massive successes of british films and they were all made here. >> 1 million square foot of studio and back lot space. this place watched film history in the making. the ceo is a titan of u. k. film. >> pinewood has a wonderful heritage of being involved in film making for over 80 years now. we're producing some of the most iconic movies that you'll see on the screen and have seen on the screen over the last 80 years. >> those films help the company net $100,000,000 in 2014 but now they're looking to the explosion in digital like high production cable and video games to fuel it's growth. asked if he's concerned there could be a content bubble, he says no way. >> consumers are saying quite
the opposite. more and more content is being consumed across the world, globally. u.k. produced films and television and video games are achieving more than their fair share of that growth. >> why the u.k.? a big reason is tax breaks. qualifying films made in the u.k. get a tax rebate of 25% of their production budget. disney netted $250 million since the scheme was introduced in 2007. that peaked last year at over $75 million. it means production facilities like pinewood are growing. it is in the midst of a $300 million expansion that will add 10 sound stages and double the size of its current lot in 2016. that will let producers do more jaw dropping scenes like this. >> lots of factors help to differentiate pinewood and this is one of them. the biggest blue screen in the world used in films such as
casino royale in 2006 and exodus. he is unno illusions. even with tax incentives the market is more competitive. that's forcing them to look beyond european shores. >> we have facilities in five different territories around the world. we're very focused on supporting our customers in north america but looking at the new markets so we have a studio in malaysia. we're looking closely at the chinese market. >> as for the success of the company's u.k. business, he's not too concerned. >> clearly we have to find our competitive corner. domestic film industries in those territories have looked at the u.k. model. they aspire to achieve the kind of work that we're doing and that's part of the reason why pinewood is spreading it's wings internationally.
so susan the overall size of the u.k. film industry still a long way behind that of hollywood but the growth and the quality certainly have swagger. for now, i'll send it back to you. >> thank you so much. wilf there in westminster. looks good in those pine wood studios. jennifer lawrence by the way, she is a big hollywood star, and she has been talking about gender inequality when it comes to pay in hollywood in an essay entitled why do i make less than my male co-stars. she learned about the salary gap between her and her leading male hollywood counterparts. she found out she was making less than bradley cooper and jeremy renner and christian bale and she was saying, why is this the case when, you know, all we do is we have different
genitalia but we're doing the same thing, aren't we? she is going to make more than chris pratt in the up coming movie but she says her learning lesson in this is she should not be afraid as a woman to be asking for more and advocating for more because men are not afraid of being labeled as spoiled brats and they're willing to fight for every dollar and that's something that she thinks that women should do more of. >> she's not the first one to make that point though. that's a very important note too. meryl streep has been talking about this for a long, long time and there's been many oscar speeches about it but certainly very important message. >> you go, jennifer. i like you. still to come on the program, earnings season begins with jpm's miss. we'll get you more after this.
hi, everyone. good wednesday morning. welcome to worldwide exchange. i'm susan li. >> these are your headlines from around the world. >> a bad earnings omen. jp morgan kicks off the financial reporting season with a revenue and profit miss sending shares down in frankfurt trade. >> intel shares sharply lower despite an eps beat in the third quarter. >> democratic presidential candidates clash in their first primary debate but front runners hillary clinton and bernie sanders agree the economic playing field needs to be led.